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'We are finally leaving 1977 behind': Revisions to debt collection rules allows collectors to contact people via online platforms

Effective Tuesday, debt collectors can now contact consumers through social media when they seek repayment of unpaid debts.

ARIZONA, USA — Effective Tuesday, debt collectors can now contact consumers through social media when they seek repayment of unpaid debts.

The Consumer Financial Protection Bureau updated the Fair Debt Collection Practices Act to the digital age and added two new rules that clarify how debt collectors communicate with consumers using email, text messages or social media. The revision makes it clear what they can and cannot say when they make contact.

“We are finally leaving 1977 behind and developing a debt collection system that works for consumers and industry in the modern world,” said Kathleen L. Kraninger, the former CFPB director who oversaw the rule changes, in a blog post. 

What the rule means for consumers

Debt collection agencies can still call people when inquiring about money borrowed, but the new rule limits debt collectors to call consumers seven times a week per account in collection.

If you engage in a phone conversation with a debt collector, they are prohibited from calling you about that specific debt again withing seven days of your talk.

The biggest change is that collection agencies can email, text message and reach out directly to consumers on social media to seek repayment of money owed.

But they have some limitations:

  • Debt collectors must identify themselves when they reach out; allowed to send you a friend or follow request
  • In each message, they must provide a simple way to opt out of being contacted online; there’s no cap of how many messages they can send
  • Any form of communication must be private; can’t post on your page or comment if it can be seen by your friends or followers.

The new rule prohibits debt collectors from suing or threatening to sue consumers on time-barred debt; a debt that is beyond the statue of limitations.

Collection agencies must either speak to the borrower in person, by telephone or wait at least 14 days after sending a letter or e-mail, including a social media message, before reporting a defaulted debt.

Advocates worry changes mean trouble for consumers

The new rules worry consumer advocates like April Kuehnhoff who said the changes bring "all sorts of privacy concerns," and scams.

“I’ve already gotten my first scam debt collection email, so they’ve already started even before the effected day of the new rule,” said Keuhnhoff, who is a staff attorney at the National Consumer Law Center.

Although people can opt out of being contacted by debt collectors, Keuhnhoff said a better approach would have been giving consumers to option to opt in to electronic messages.

“You can tell them you don’t want them to contact you,” said Ed Mierzwinski, Arizona PIRG’s Federal Consumer Program Director. “If they really want to reach out to you, they’ll send you a letter.”

The new changes could mean trouble for people that don’t check their emails or social media messages on the regular, Mierzwinski said.

Keuhnhoff worried debt collectors could also misidentify a person and send information to a wrong borrower, compromising personal and private data.

“Complain to the CFBP and the state attorney general if you have any complaints about debt collectors,” Mierzwinski said.

If you’re having trouble with a debt collector, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372). You can also report any problems to your state’s attorney general. You also may be able to sue a debt collector in state or federal court.

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